Tuesday, March 16th, 2010

… real household consumption in sub-Saharan Africa is growing around 3.3 percent per annum, i.e. more than three times the 0.9 to 1.0 percent reported in international data sources and on par with the growth experienced in other developing countries.

School children in Bunkpurugu in Northern Ghana 2005, a very cheerful picture, not directly related to the story, but cheerfully upbeat.

Alwyn Young of the Department of Economics of the London School of Economics published the study The African Growth Miracle PDF in September 2009. As the abstract says:

Measures of real consumption based upon the ownership of durable goods, the quality of housing, the health and mortality of children, the education of youth and the allocation of female time in the household indicate that sub-Saharan living standards have, for the past two decades, been growing in excess of 3 percent per annum, i.e. more than three times the rate indicated in international data sets.

The DHS data on consumption of consumer durables and housing, children’s health and mortality, the schooling of youth and the allocation of women’s time between marriage & childbirth and market activity, indicate that since 1990 real material consumption in sub-Saharan Africa has been rising at a rate more than three times that recorded by international data sources such as the PWT, and on par with the growth taking place in other regions of the world. This is a miraculous achievement, given that the very real ravages of the AIDS epidemic have deprived families of prime working age adults, burdened them with medical and funeral expenses, orphaned their school age children and directly and adversely affected the health of their infants. And yet, the overall health and mortality of children is improving, their school attendance is rising, and family consumption of a variety of material goods is growing at a rapid rate. (p.58)

As he points out:

The paucity and poor quality of living standard data for less developed countries is well known and is motivating expanding efforts to improve the quality of information, as represented by the World Bank’s International Comparison Programme and Living Standards Measurement studies. However, there already exists, at the present time, a large body of unexamined current and historical data on living standards in developing countries, collected as part of the Demographic and Health Survey (DHS). For more than two decades this survey has collected information on the ownership of durables, the quality of housing, the health and mortality of children, the education of the youth and the allocation of women’s time in the home and the market in the poorest regions of the world.

…

In this paper I use the DHS data to construct estimates of the level, growth rate and inequality of real consumption in 29 sub-Saharan and 27 other developing countries. These estimates have the virtue of being based upon a methodologically consistent source of information for a large sample of poor economies. Rather than attempting to measure total nominal consumption and marry it to independently collected price indices, they employ direct physical measures of real consumption that, by their simplicity and patent obviousness (the ownership of a car or bicycle, the material of a floor, the birth, death or illness of a child), minimize the technical demands of the survey. While the items they cover provide little information on comparative living standards in developed countries, in the poorest regions of the world they are clear indicators of material well being, varying dramatically by socioeconomic status and covering, through durables, health & nutrition and family time, the majority of household expenditure.

He provides tables, and far more detail as to his methodology and his findings. You can read the entire economic report here, The African Growth Miracle PDF.